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Taking a step back, what's the advantage to society of every company growing into a conglomerate? Why not just let a company live and die on its core business?

Taking a step back, what's the advantage to society of every company growing into a conglomerate? Why not just let a company live and die on its core business? Do we really want to allow all that power to be consolidated into company boards and executives?

smithkl42 11y ago
That's a great point for the larger societal stakeholders in our collective capitalist enterprise. But given the limited horizon that the market places on Twitter's management and shareholders, I don't know that it answers the question of why Twitter doesn't expand beyond its current narrow focus.
Dwolb 11y ago
It's not really a societal advantage, it's an investor one. If you're an equity holder you expect some return on capital you've contributed. If you're Twitter, this means returns on current products/services or on new ones. Hopefully, from a strategic perspective new products are either higher return on capital than current products/services or exhibit (excuse the wording) synergies with current products/services. Additionally OP alludes to a greater vision which a company may use to impact its decision making on new projects to pursue.
zalzane 11y ago
imagine if snapchat announced that they would start living and dying on their core business rather than try to expand now you have a bunch of investors who are upset that they invested in a company at a 16 billion dollar valuation that has jack diddly squat for income and has no promise of some magical "over the horizon" way to monetize
- tajano 11y ago
  This sounds about right. Wait, I forgot, Snapcash.
- Aleman360 11y ago
  But that just doesn't seem sustainable in the long term. That's how power and wealth consolidate into a small number of hands.
deleted 11y ago
[deleted]
rezashirazian 11y ago
In all honesty how far can you take microblogging? Twitter's core business is something any half decent developer can build over a weekend and polish over a few months. There is so much you can do to attract and keep your users engaged with Twitter's core business. For the growth Twitter investors are looking, twitter needs to expand beyond its 140 character tweets and look for possible innovative ideas that can cultivate with its current infrastructure, data and talent.
- mikaraento 11y ago
  It looks like a weekend project but isn't. Scaling it up took Twitter a long time. Showing your feed is a very expensive operation (there are users with a large number of followers and users who follow many others) and syndication and clients amplify the number of operations. Source: I was one of the developers of Jaiku, which had a very similar model.
Gladdyu 11y ago
Not necessarily, but the world is evolving which means that maintaining the same product will not be profitable forever (or in this case, never). Companies will want to continue exist and generate more profits for their owners, which means deploying new products - and these products might appear to be different but upon closer inspection they kind of make sense. Facebook is connecting everything (core product + whatsapp + the internet balloons etc.). Googles core business appears to be analyzing large, dynamic and complex datasets (the web, maps, their biotech research, self-driving cars). Of course there are always outliers (Android), but companies go for profit. If they can incorporate something new they will.

smithkl42 11y ago

That's a great point for the larger societal stakeholders in our collective capitalist enterprise. But given the limited horizon that the market places on Twitter's management and shareholders, I don't know that it answers the question of why Twitter doesn't expand beyond its current narrow focus.

Dwolb 11y ago

It's not really a societal advantage, it's an investor one. If you're an equity holder you expect some return on capital you've contributed. If you're Twitter, this means returns on current products/services or on new ones. Hopefully, from a strategic perspective new products are either higher return on capital than current products/services or exhibit (excuse the wording) synergies with current products/services. Additionally OP alludes to a greater vision which a company may use to impact its decision making on new projects to pursue.

zalzane 11y ago

imagine if snapchat announced that they would start living and dying on their core business rather than try to expand now you have a bunch of investors who are upset that they invested in a company at a 16 billion dollar valuation that has jack diddly squat for income and has no promise of some magical "over the horizon" way to monetize

tajano 11y ago
This sounds about right. Wait, I forgot, Snapcash.
Aleman360 11y ago
But that just doesn't seem sustainable in the long term. That's how power and wealth consolidate into a small number of hands.

deleted 11y ago

[deleted]

rezashirazian 11y ago

In all honesty how far can you take microblogging? Twitter's core business is something any half decent developer can build over a weekend and polish over a few months. There is so much you can do to attract and keep your users engaged with Twitter's core business. For the growth Twitter investors are looking, twitter needs to expand beyond its 140 character tweets and look for possible innovative ideas that can cultivate with its current infrastructure, data and talent.

mikaraento 11y ago
It looks like a weekend project but isn't. Scaling it up took Twitter a long time. Showing your feed is a very expensive operation (there are users with a large number of followers and users who follow many others) and syndication and clients amplify the number of operations. Source: I was one of the developers of Jaiku, which had a very similar model.

Gladdyu 11y ago

Not necessarily, but the world is evolving which means that maintaining the same product will not be profitable forever (or in this case, never). Companies will want to continue exist and generate more profits for their owners, which means deploying new products - and these products might appear to be different but upon closer inspection they kind of make sense. Facebook is connecting everything (core product + whatsapp + the internet balloons etc.). Googles core business appears to be analyzing large, dynamic and complex datasets (the web, maps, their biotech research, self-driving cars). Of course there are always outliers (Android), but companies go for profit. If they can incorporate something new they will.